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The Real “Flippening”

Published August 10, 2017

Cryptoasset investing is vitriolic at the best of times. Factions have spawned from ideology and greed. Lay people comment on the technical merit of their blockchain of choice – opinions governed by their own misguided dreams of 5,000 per cent returns – whilst developers denounce the opinions of others and pigheadishly push forward with their own technical ideologies. Communities are divided and an age old “us and them” mentality runs riot. Business leaders, exchanges and mining corporations are accused of the wildest conspiracies and entrenched investors have become incapable of seeing the bigger picture.

“The Flippening”, as so many call it, refers to a point at which the critical mass of one coin suddenly and dramatically takes the lead over another. Ethereum came close to doing this in May of this year, when its market cap exploded to near-parity with that of Bitcoin’s. Those owning Ethereum Classic talk of such a flippening with Ethereum, and Bitcoin Cash evangelists speak of a day when their coin topples Bitcoin. The obsession over a single coin’s dominance is understandable – some individuals have literally remortgaged their homes in the hope that their horse wins the race – but whilst crypto-enthusiasts are at each other’s throats and doing their level best to recruit new investors, the real flippening is well underway.

What happens when cryptocurrencies replace fiat; when money is controlled by the laws of mathematics and not by the laws of men? The real flippening – one that so many in this market fail to see – is not between Ethereum and Bitcoin, but between cryptocurrencies and fiat. The desire for a deflationary currency with a guaranteed supply is very real, and has rapidly been increasing since Bitcoin’s inception 9 years ago. In the near future, Ethereum (or similar) will be essential for machines and humans to transact value autonomously with one another. US dollars and fiat currency simply will not meet the requirements needed to interact in a world based on “Internet of Things” devices. In such a fiat economy, moving value between machines would require several middlemen, each with vested interests, each taking a cut as the value moves. Ethereum can do all of this for a negligible cost with no delays; exchanging “hands” autonomously based on the code by which its movements are determined.

The real flippening is an inevitability of our digital evolution. But in the existing world of debt-based economies, highly leveraged consumerism and fractional reserve banking, a move to Ethereum would be catastrophic. When employees begin demanding wages in Ether and banks are forced to conduct more business in these cryptoassets, governments and central banks begin to lose monetary control. The US dollar is no longer worth what it was for no other reason than its incompatibility with modern technology. Ether suddenly becomes more expensive, and banks – who now require these cryptocurrencies – begin losing money. In the inevitable economic cycle of boom and bust, the bust hits even harder. In an economy dominated by cryptocurrencies, the once heroic printing press of 2007 has lost all viability. Governments awaken to the fact that they cannot mine Ether like they can print new bank notes. At this point, the economy crashes into a deep depression. Those lucky enough to hold cryptoassets are now extremely wealthy, and these individuals, institutions and savvy governments take the lead in rebuilding a digitized economy capable of far greater things than can be imagined today.

Despite this, our attention – sadly – is directed towards the cannibalistic crypto-flippenings that are so widely discussed today. The tribalism and infighting which stems from short term greed and ideology is serving as distraction; drawing time and energy away from a much more powerful movement that is already in play.